DUBAI: Gulf markets were little moved yesterday as retail investors bet on small-cap stocks in thin cues ahead of third-quarter earnings, while Qatar’s bourse dropped as news emerged that a state-run energy firm planned to list its unit.
Qatar Exchange index dropped one percent to its lowest close since September 12 as 16 out of 20 stocks declined.
United Development Co fell 2.2 percent.
Some investors have cut positions to free up cash to invest in an expected local initial public offering (IPO).
Qatar Petroleum has picked two banks to help arrange an IPO in one of its units, an issue which could be worth around QR3.2bn ($880m), banking sources said. The IPO may launch by the end of this year.
Saudi Arabia’s measure resumed trading after a two-session hiatus due to a national holiday. The index eased 0.3 percent after trading flat most of the session; an indication investors have little direction.
It held above the psychologically important level of 8,000 points and is up 17.7 percent year-to-date but analysts say it will need strong quarterly earnings to justify breaking above the August intra-day peak of 8,223 points.
“We don’t expect to see big surprises in Saudi’s third quarter results,” said Sleiman Aboulhosn, investment analysts at ING Investments. “Overall, results should be good but I doubt they’ll be good enough to fuel the rally higher, especially with geopolitical threats in the background. We might see some more consolidation over the next few weeks.”
Najran Cement shares rose 2.3 percent after the company said in a bourse statement it had started commercial production of clinker from its third line.
The main sector of petrochemicals slipped 0.5 percent and banking index declined 0.3 percent.
“Pressure on banking sector margins began abating last quarter, but I don’t expect a major improvement until early 2014. We saw evidence of increasing global demand for petrochemicals but it’s unclear whether or not this demand recovery will trickle through 3Q13 results,” Aboulhosn added.
In the United Arab Emirates, small- to mid-cap companies helped Dubai’s bourse climb 0.3 percent and end higher for a third day and near the August 2013 peak.
“The market is in a phase where we’re led more by stocks below Dh1, which tells me its local high net worth individuals who are in speculative investments,” said Mohammed Ali Yasin, Managing Director of Abu Dhabi Financial Services, wholly owned by National Bank of Abu Dhabi.
Institutional funds are waiting for corporate earnings before adjusting positions, leaving retail investors to dominate, he added.
Shares in Dubai’s Gulf Navigation surged 14.8 percent to their highest close since May 2013. The stock rose 10.1 percent on Monday after the firm said it planned to sell some ships and might get a cash injection from major shareholders, which it did not name.
The stock accounted for nearly half of all trading on Dubai’s bourse.
Dubai bank Mashreq fell 8 percent, snapping a three-session rally in which it surged 51.7 percent. The lender last week said it would raise its foreign ownership limit to 20 percent. The stock is little traded, with less than 29,000 shares changing hands in the past four sessions.
Abu Dhabi’s benchmark climbed 0.3 percent, extending 2013 gains to 45.5 percent.
In Egypt, the benchmark index rose 0.6 percent to a seven-month high, extending gains since a court banned the Muslim Brotherhood (MB) from carrying out any activities in the country.
Reuters
